Zomato Ltd, listed as Eternal Ltd on the National Stock Exchange (NSE), experienced a notable surge in its share price on April 8, 2025, gaining ₹4.92 or 2.35% to close at ₹214.55. This rally was fueled by renewed investor optimism regarding the food technology sector's growth prospects and Zomato's potential expansion into new revenue segments.
The trading summary for the day highlighted a strong performance, with shares opening at ₹213.19 and reaching an intraday high of ₹219.19 before slightly retracing gains. The day's low was recorded at ₹210.81, closing at ₹214.55. Zomato's market capitalization stands at ₹2.02 lakh crore, with a price-to-earnings (P/E) ratio of 290.66 and a dividend yield of nil. Over the past year, the stock has seen a 52-week high of ₹304.70 and a low of ₹146.30, reflecting significant volatility.
The high P/E ratio of 290.66 indicates that investors have high growth expectations for the company, despite the absence of dividend payouts. This valuation suggests that investors are banking on Zomato's scalability and tech-driven model to deliver future returns.
Several catalysts contributed to Zomato's bullish movement on April 8. Analysts noted a sector-wide rally in digital and food technology stocks, alongside market buzz about Zomato's plans to expand into Tier-2 and Tier-3 cities. Reports also indicated improved operational efficiency and declining delivery costs, which have positively impacted investor sentiment. Additionally, the broader market indices showed positive momentum, further buoying food delivery stocks.
Market experts believe that Zomato's rally is largely volume-driven, with significant buying activity observed at lower levels after recent consolidations near ₹200. Key technical indicators are turning positive, making the stock appealing to momentum traders. If Zomato can maintain a short-term breakout above ₹220, analysts predict potential gains toward ₹230 to ₹240.
For traders, maintaining a trailing stop-loss near ₹208 is advised for effective risk management. Investors are encouraged to evaluate entry points near ₹210 to ₹215, particularly given the underpenetrated food delivery market in India, which offers long-term growth potential. Zomato's tech-first approach, increasing order volumes, and strategic acquisitions are expected to support sustained growth.
In a broader context, JM Financial has issued a buy recommendation for Zomato, setting a target price of ₹280. For the quarter ending December 31, 2024, Zomato reported a consolidated total income of ₹5,657 crore, marking a 12.69% increase from the previous quarter's income of ₹5,020 crore and a 61.31% rise compared to ₹3,507 crore for the same quarter last year. The company also reported a net profit after tax of ₹59 crore in the latest quarter.
The Indian stock market as a whole has been witnessing a strong recovery. On April 17, 2025, the Nifty 50 index rebounded sharply, surging over 250 points to reach 23,707.45, reflecting a 1.15% rise, while the BSE Sensex climbed over 950 points to 78,007.05, up 950.76 points or 1.27% by midday. This recovery followed a cautious opening due to global cues and earnings season nerves, but was buoyed by strong domestic fundamentals and renewed foreign portfolio investor (FPI) buying.
Ajay Bagga, a banking and market expert, commented on the market's resilience, stating, "India held up well in the post-April 2 sell-off. There has been a positive rerating of the Indian markets in view of the domestic structural story and lack of external sector fragility." He noted that FPIs have turned net buyers this week, driven by a positive outlook for the Indian corporate sector, coupled with a normal to above-normal monsoon forecast that bolsters domestic consumption.
On the sectoral front, all major indices were in the green except for Nifty IT, which had opened over 2% lower but managed to trim losses. The Nifty Bank stocks led the rally, with the Nifty Private Bank index rising more than 1.3%. Vijay Chopra, another market expert, attributed the market's momentum to easing crude prices, a strengthening rupee, falling inflation, and a promising monsoon forecast. He added, "Strong deposit growth, likely fueled by six months of market weakness, could be setting the stage for robust earnings. Shorts seem trapped amid Trump’s pause and the long weekend."
In summary, Zomato's recent share price recovery signals a potential breakout, supported by positive earnings and favorable market conditions. As traders and investors look for opportunities in the food delivery sector, Zomato's growth strategy and the overall market's performance will be critical factors to monitor in the coming weeks.
